MHA's Executive Briefing

CMS Issues CAH Relocation Guidelines

The Centers for Medicare and Medicaid Services (CMS) has issued guidelines regarding those instances when existing CAHs relocate. The guidelines appear to adhere to the same "75% rules" that were described in the final regulations published earlier this year. Hospitals nationwide worked hard to turn back CMS regulations that would preclude any CAH not currently in the midst of a construction project from relocating outside of its existing campus. The final regulations allowed relocation as long as the CAH in its new location—

"(i) Serves at least 75 percent of the same service area that it served prior to its relocation;
(ii) Provides at least 75 percent of the same services that it provided prior to the relocation; and
(iii) Is staffed by 75 percent of the same staff (including medical staff, contracted staff, and employees) that were on staff at the original location."

These requirements appear reasonable, but they are very general. As we all know, the application and interpretation is where the potential problems occur. 

CMS issues guidelines on CAH relocation

The Centers for Medicare & Medicaid Services Nov. 14 issued interpretive guidelines regarding the relocation of any critical access hospitals (CAH). The guidelines relate to a requirement established in the FY06 inpatient prospective payment system rule that allows necessary provider critical access hospitals to relocate as long as they continue to serve 75% of the same population, provide 75% of the same services and employ 75% of the same staff. However, CMS’ guidelines are specific, restrictive and apply to all CAHs needing to relocate, regardless of necessary provider designation. The rule also changes the definition of “mountainous terrain” and “secondary road,” making it more difficult for hospitals to maintain their CAH designation if they chose to relocate.

Don May, vice president for policy at the American Hospital Association, said “CMS’ guidelines make major changes that are overly prescriptive and will hinder hospitals’ ability to improve the care provided in their communities. AHA will continue to review the guidelines and recommend changes to CMS.”

[ via AHA News ]

Sen. Coleman Introduces Rural Health IT Bill

Sen. Norm Coleman (R-Minn.) on Nov. 2 introduced a bill (S 1952) that would authorize grants to develop rural health IT, Technology Daily reports.

Under the legislation, states would be eligible for federal aid based on their number of critical-access hospitals, and the funding would go to government-run and not-for-profit hospitals.

"Most rural hospitals do not have the personnel capabilities, or access, to compete with larger health systems for funding," Coleman said in a statement. "If we have the means to help reduce medical errors, improve quality of care and reduce rising health care costs, it is imperative that small towns and communities benefit as well."

The bill also calls for the HHS secretary to update standards of the National Council for Prescription Drug Programs, and it would give the HHS secretary the authority to adopt electronic health care transaction standards recommended by the American National Standards Institute, Technology Daily reports (Casey, Technology Daily, 11/4).

[ via iHealthBeat ]

Lawmakers oppose proposed rule's restriction on critical access hospitals

More than 75 House and Senate members oppose a provision in the proposed inpatient rule for fiscal year 2006 that would prevent most critical access hospitals from rebuilding their facilities more than 250 yards from their current location. In recent letters to Centers for Medicare & Medicaid Services Administrator Mark McClellan, the 62 representatives and 17 senators said the "arbitrary" restriction could jeopardize the critical access status that enables these hospitals to maintain essential services for rural Americans. "As communities around the country will attest, CAH has literally been a lifesaving designation for rural towns," the representatives said, adding that many are located on small campuses with no room to expand. The senators said the provision "should be replaced with a more flexible rule that allows hospitals to modernize." The letters will be available soon on the AHA Web site. The AHA also opposed the relocation provision in a recent comment letter to CMS. (via AHA News)

Bill to extend cost-based payment policy introduced in House

Reps. Jerry Moran, R-KS, Ruben Hinojosa, D-TX, and John McHugh, R-NY, on May 12 introduced the House companion to S. 933, AHA-backed legislation that would give rural hospitals with 50 or fewer beds the option of receiving Medicare payments for inpatient, outpatient and ambulance services based on 101% of costs. The option also would extend to home health services if the hospital is the sole provider of such services in the community. In addition, the Rural Community Hospital Assistance Act would update the critical access hospital program to extend 101% cost-based reimbursement to skilled nursing facility, ambulance and home health services, and to distinct-part psychiatric and/or rehabilitation units. (via AHA News)

Senate bill would extend cost-based payment policy to more rural hospitals

Sens. Sam Brownback, R-KS, and Ben Nelson, D-NE, on April 28 introduced legislation (S. 933) that would give rural hospitals with fewer than 50 beds the option of receiving Medicare payments for inpatient, outpatient and ambulance services based on 101% of costs. The option also would extend to home health services if the hospital is the sole provider of such services in the community. In addition, the Rural Community Hospital Assistance Act would update the critical access hospital program to extend 101% cost-based reimbursement to skilled nursing facility, ambulance and home health services, and to distinct-part psychiatric and/or rehabilitation units. "This bill is necessary to ensure the survival of these essential providers and that seniors located in rural areas continue to receive access to quality health care services," said Rick Pollack, AHA's executive vice president. (via AHA News)

MedPAC discusses June report on CAHs

The Medicare Payment Advisory Commission on April 21 praised the critical access hospital program’s success in preserving rural hospitals and rural beneficiaries’ access to care, as part of its discussion in preparation for an interim report on the program due to Congress in June. The commission also reviewed data on CAH quality that showed that smaller CAHs have lower patient complication rates, while larger CAHs have lower mortality rates. The commissioners agreed that their spring report to Congress would highlight two issues of concern about the CAH program -- swing-bed payments and the number of CAHs located within close proximity of another hospital -- but would not include recommendations, saying it is too soon to recommend major changes to the relatively young program without fully understanding their impact. Don May, AHA vice president for policy, praised the commission for “dropping proposed recommendations that could have led to the closure of many CAHs, and in stead highlighting issues for further study and analysis.” (via AHA News)

CAHs in Medicare Urban County

The Medicare Modernization Act (MMA) states that hospitals designated as necessary providers are grandfathered in as critical access hospital (CAH) facilities. However, the Centers for Medicare and Medicaid (CMS) state that if a CAH now resides in a Medicare urban area, that the state must designate the hospital or county as rural, by regulation or legislation. Also the hospital must then apply to CMS to be designated as CAH. AHA recommends that states take the path of least resistance and follow the CMS procedures. CAH status remains in effect for these hospitals until September 30, 2006, so there is ample time for GHA to work with the Department of Community Health on what form the policy should take and whether it should have a greater reach than just CAH status. Please see the attachment below related to this CAH issue.

Download ruralhealth.pdf

AHA to MedPAC: Critical access program essential to rural safety net

The AHA on April 1 urged the Medicare Payment Advisory Commission not to underestimate the importance of the critical access hospital program to preserving access to health care in rural America as it prepares a June report to Congress that may recommend changes to the program. “We are concerned that information presented at the last [commission] meeting may have overlooked and undervalued the importance of this program to the Medicare patients served by these critical providers,” Carmela Coyle, AHA senior vice president for policy, said in an April 1 letter to the commission. Critical access hospitals are reimbursed under Medicare based on their actual costs to provide care, rather than through prospective payment systems. “That difference between cost-based payments and PPS payments is a relatively small amount for the Medicare program -- but the impact on small CAHs and the people living in those 1,000 rural communities is tremendous,” Coyle said. (via AHA News)